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Sensible Financial Planning
Integrated Financial Plan
Integrated Financial Advisory
Portfolio Management
We Recommend Index Funds
Navigating the Risk-Return Maze
Selecting Specific Mutual Funds
Making the Transition
Reporting on your Portfolio's Performance
Restoring Balance
Where We Practice
Sensible Financial Planning our services investment and portfolio management

We help you manage your investments. We believe very strongly that investing is the mechanism to move your purchasing power to the times when you need it.

This perspective helps you focus on the key investment questions:

  • How can you get the most spending power later while giving up the least spending power now? [High return]
  • How can you be most certain the spending power you plan for will be there? [Low risk]

Unfortunately, seeking more purchasing power later requires taking more risk - it's the well-known risk-return tradeoff at work. Once you decide how much spending power to seek, it turns out that the answers to the key questions are very simple:

  • Keep your costs down to keep more spending power
  • Diversify your investments to manage the inherent risks

So, for Sensible Financial, managing investments means simply:

  1. Helping you decide how much future spending power to seek by providing a clear statement of the risk-return trade-off.
  2. Recommending diversified, low cost investments to accomplish your spending power objective at the lowest possible risk [we recommend index mutual funds almost exclusively]
  3. Doing the work to put the investment program into place: opening accounts, transferring assets, purchasing investments
  4. Reporting to you on the performance of your investments
  5. Recommending investment purchases and sales to restore your portfolio to your desired risk level and target return (rebalancing)

In a word, no. Accepting more investment risk does not guarantee more return.

You may have heard that higher risk investments will yield higher returns. It is more accurate to say that higher risk investments offer the hope of more return.

If you invest in lower risk investments, chances are good that your asset growth and retirement living standard will be relatively close to what you expect. We call this "betting on your savings," because you are relying primarily on your savings to help you achieve your financial goals. Investment returns contribute a relatively small (and more predictable) proportion of your financial assets.

If you invest in higher risk assets, you can hope for higher returns, and less savings may be required (or you may hope to retire earlier). It is less likely, however, that your asset growth will follow closely the trajectory you anticipate. Some years will produce higher returns than you expect while other years will produce lower returns or even significant losses. And, it is more likely that you will be disappointed, needing to work longer in order to assure the retirement living standard you desire. We call this "betting on the market," because you are relying more heavily on favorable stock market returns for the success of your financial plan. You may be very pleasantly surprised, or you may be very disappointed, and there is no way to know in advance.


Buying and selling are costly, so we recommend very little trading. We believe there are only a few good reasons to trade:

  • You buy when you add new savings to the portfolio
  • You sell when you withdraw from your savings to spend on your goals
  • You buy and sell to restore balance to your portfolio